Based on technical analysis the bearish trend is present in USD/CAD currency pair, 4 hours time frame based on USD/CAD Elliott Wave Long Term Forecast. As I have forecasted few hours ago, the price of USD/CAD pair is going to drop now to prints a Bearish Impulse Elliott wave pattern and traders should look for a sell trade. So, all those Forex traders who have followed my Elliott wave forecast have made the right decision as price has descended.
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Strong key resistance level is present at 1.3385 price area. In my judgment, price action in USD/CAD currency pair is now going to rise up more first. So, market is going to remain bullish on a medium term basis. Next, expects a long term top in price action as well. Based on Elliott wave forecast, the current Bearish trend is part of a Bearish Zig Zag corrective Elliott Wave pattern, bearish wave 2 leg in higher time frame.
Currently, bearish corrective Elliott wave pattern wave c looks in-complete. So, a good idea is to look for a possible sell trading chance to join the down trend around 1.3270 price area. However; if the price of USD/CAD currency pair breaks above 1.3385 vital resistance level then down trend is going to end. In such a market scenario, it would be best not to trade the Forex market and re-do the USD/CAD Elliott wave analysis in four hours chart.
Now, at this point; I must acknowledge that the trend is actually bullish in higher time frame of USD/CAD currency pair.
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Below is the daily chart of USD/CAD pair with my Elliott wave forecast which shows us a big picture and a well started bullish trend as well.
To me; price has printed Bullish leading diagonal wave 1 leg. Now, price action is falling down to complete the Bearish Zig Zag corrective wave 2 pattern. So, now market is moving down on a short term basis to complete the bearish corrective wave 2 leg. The bearish corrective wave 2 leg is the last and final decline as price is going to prints a long term bottom after that. Within the Bearish corrective Zig Zag Elliott wave pattern, all sub-waves must sub-divides into 5, 3 and 5 waves pattern.
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The following Elliott Wave Bearish Zig Zag corrective pattern diagram shows us a completed Bearish Zig Zag pattern within the frame work of Elliott wave principle.
The bearish Zig Zag wave pattern of the Elliott wave principle shows that how price action does not moves in a straight line fashion but in a series of lows (retracements) and highs (rises). Bearish Zig Zag Elliott wave pattern in a down trending market could be seen inside the above image. The figure shows what a Bearish Zig Zag Elliott wave pattern looks like. If a trader knows what a bearish Zig Zag pattern looks like, then it would become much easy for a currency trader to actually analyze the Forex charts and make a trading decision as well.
A Bearish Zig Zag consists of two Impulse Elliott wave patterns, joined by a B wave. We use A English alphabet to label first impulse Zig Zag wave leg and we use C English alphabet to label second Impulse Zig Zag wave leg. Please take a note that Bearish Zig Zag pattern is a corrective Elliott wave pattern which appears at a pull back in a main down market trend.
Based on my USD/CAD technical analysis using Elliott Wave in daily chart, we have got a complete Bullish Leading Diagonal motive wave 1 leg and price action is now falling down to prints bearish wave 2 corrective leg. However; it is possible if price breaks below green colour support level then forecast will become in-valid. Now, price action is probably going to move sideways and then fall down more to prints a bearish corrective wave 2 leg. To me; in four hours chart of USD/CAD currency pair the bearish leg wave bi which is part of a higher degree wave 2 in daily chart is just a bullish pull back in an up trend leg as mentioned above as wave 2 Bearish Zig Zag corrective wave pattern inside a daily price chart.
Strong key support level is present at 1.2060 price area in USD/CAD daily chart. So, I expect market to first move sideways for next coming trading days and then may be starts the decline. So, in my opinion market is going to remain bearish on a medium term basis, expects a bearish leg in market. Next, market is probably going to resume the up trend after that in USD/CAD currency pair, in daily chart.
Now, when an existing Bullish Elliott Wave Long Term Forecast in USD/CAD is going to fail?
Well, the forecast is good for about next two weeks time and price should stays below 1.2060 support area in daily time frame to keep the up trend alive. A clear bearish out in price action below 1.2060 support area will end the up trend and bullish Elliott Wave Long Term Forecast; in such a market scenario, it would be best not to trade the market and re-analyze USD/CAD daily chart.
Based on USD/CAD Elliott Wave Long Term Forecast the trend is up in daily chart and a good idea is to look for a buy trade around 1.2250 price area, as price is going to rise up after that towards 1.3835 but a clear bearish break down in price action below 1.2060 vital support area will end the up trend. On a medium term basis, it is a bearish trend in USD/CAD 4 hours time frame and a good idea is to take a sell trade around 1.3270 price level and price is probably going to drop lower towards 1.2465 price level. However; if the price of USD/CAD currency pair breaks above 1.3385 vital resistance level then bearish trend is going to end.
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